Brent Crude Falls to $111.43 as Hormuz Closure Drags On

Why did oil prices drop while the Strait of Hormuz remains closed?

Brent crude fell 2.7% to $111.43 per barrel on May 5, even as the Strait of Hormuz — the chokepoint for roughly one-fifth of global oil supply — remains largely closed to tanker traffic. The drop signals that markets had already priced in the disruption or that alternative supply routes and strategic reserves are absorbing the shortfall more effectively than traders initially expected.

For small fleets, the immediate question is diesel. Brent crude is the international pricing benchmark that feeds into U.S. diesel wholesale markets, typically with a two-to-four-week lag. A $111 Brent barrel translates to roughly $3.40–$3.60 per gallon at the pump under normal refining margins, before state taxes and local markups. The 2.7% pullback shaves about three cents off that baseline, but fleets running tight fuel budgets should note that $111 is still 40% above pre-2025 averages and well into territory where fuel surcharges become make-or-break on longer hauls.

The Hormuz closure itself has not eased. Tanker traffic through the strait — which normally moves 21 million barrels per day from Persian Gulf producers to Asia, Europe, and the U.S. Gulf Coast — has been rerouted or delayed since late April. The price retreat suggests that the initial panic premium has worn off as buyers confirm that Saudi Arabia, the UAE, and Iraq are successfully moving crude through alternate pipelines to Red Sea and Mediterranean terminals, and that U.S. shale output has ticked up in response to the higher price environment.

What this means for fuel costs and settlement statements

A 5-truck fleet burning 1,200 gallons per truck per week pays roughly $20,400 weekly at $3.40 per gallon. At $3.60, that same burn costs $21,600 — a $1,200 difference that comes straight out of the settlement if fuel surcharges don't adjust. The 2.7% Brent drop buys back about $350 of that weekly delta, assuming retail diesel tracks the crude move within two weeks. Fleets with fuel surcharge clauses tied to the DOE weekly average should see relief by mid-May if the Brent price holds.

Owner-operators on spot loads without fuel surcharges are still underwater. Spot rates have not kept pace with the fuel spike — DAT's national average dry van spot rate sat at $1.87 per mile in late April, up only four cents from March, while diesel climbed 22 cents per gallon over the same window. A 500-mile load at $1.87 per mile grosses $935; fuel for the round trip at 6 mpg costs $283 at $3.40 per gallon, or $300 at $3.60. The three-cent pullback saves $2.50 on that load — helpful, but not enough to close the gap between spot rates and operating cost.

Contract carriers with quarterly fuel surcharge tables fare better. Most tables index to the DOE average with a 30-day lookback, so the May 5 Brent drop will flow through to June settlements if crude stays below $115. Fleets hauling under contracts signed in Q1 2026, when diesel averaged $2.95, are still collecting surcharges 15–20% above the baseline — enough to cover the current $3.40–$3.60 environment, though margins tighten if Brent climbs back above $120.

How long the $111 floor lasts

Brent has traded between $108 and $118 since the Hormuz disruption began. The May 5 close at $111.43 marks the bottom of that range. Analysts cited in energy markets point to three factors holding the price above $100: the Hormuz closure remains unresolved, global inventories are below the five-year average, and OPEC+ has not increased production quotas despite the supply shock. If Hormuz reopens or if the U.S. releases additional Strategic Petroleum Reserve barrels, Brent could fall toward $95–$100. If the closure extends into June or if refinery capacity tightens heading into summer driving season, $125 is in play.

Small fleets should plan fuel budgets around a $3.40–$3.70 diesel range through Q2. Lock in fuel surcharges on any new contract lanes, and avoid spot loads longer than 800 miles unless the rate clears $2.10 per mile — the threshold where a 6-mpg truck breaks even at $3.50 per gallon after fixed costs. The Brent pullback is real, but $111 crude is still expensive crude, and the Hormuz situation has not resolved.